LECTURE NOTES
ON
CONSTRUCTION
PROJECT MANAGEMENT
Emad Elbeltagi, Ph.D., P.Eng.,
Professor of Construction Management
Structural Engineering Department,
Faculty of Engineering,
Mansoura University
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LECTURE NOTES
ON
CONSTRUCTION
PROJECT MANAGEMENT
Emad Elbeltagi, Ph.D., P.Eng., Professor of Construction Management Structural Engineering Department, Faculty of Engineering, Mansoura University
Construction Project Management 2009
Copyright © 2009 by the author. All rights reserved. No part of this book may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without the prior written permissions of the author.
ii
TABLE OF CONTENTS
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CHAPTER 1
INTRODUCTION
1.1 The Need for Project Management
The construction industry is the largest industry in the world. It is more of a service than a manufacturing industry. Growth in this industry in fact is an indicator of the economic conditions of a country. This is because the construction industry consumes a wide employment circle of labor. While the manufacturing industry exhibit high-quality products, timelines of service delivery, reasonable cost of service, and low failure rates, the construction industry, on the other hand, is generally the opposite. Most projects exhibit cost overruns, time extensions, and conflicts among parties. Figure 1.1 is an example of a complicated project. Table 1.1, also, exhibits some magnificent projects that suffered from huge cost overruns.
Figure 1.1: Example of a complicated project
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Table 1.1: Magnificent projects with huge cost overruns Project Cost overruns (%) Suez Canal Sydney Opera House Concorde Supersonic Aeroplane Panama Canal Brooklyn Bridge
(Source: Mette K. Skamris, 'Economic Appraisal of Large-Scale Transport Infrastructure Investments', Ph.D dissertation, Aalborg University, 2000).
In general, the construction industry is more challenging than other industries due to: its unique nature; every project is one-of a kind; many conflicting parties are involved; projects are constrained by time, money and quality; and high risk.
1.2 The Construction Project
A project is defined, whether it is in construction or not, by the following characteristics:
- A defined goal or objective.
- Specific tasks to be performed.
- A defined beginning and end.
- Resources being consumed.
The goal of construction project is to build something. What differentiate the construction industry from other industries is that its projects are large, built on-site, and generally unique. Time, money, labor, equipment, and, materials are all examples of the kinds of resources that are consumed by the project.
Projects begin with a stated goal established by the owner and accomplished by the project team. As the team begins to design, estimate, and plan out the project, the members learn more about the project than was known when the goal was first established. This often leads to a redefinition of the stated project goals.
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might have to take a back seat when you’re making choices along the way. If customer satisfaction is the real goal, training costs might have to be adjusted accordingly.
Writing a goal statement After you get more specifics about your project’s goal, it’s a good idea to put your goal in writing in a goal statement. A goal statement outlines why you’re doing this project and what you hope to accomplish at the end. You don’t get down to specific deliverables and parameters in a goal statement. For now focus on the why and the desired result. Here are a few sample goal statements:
- The goal of the project is to upgrade the shopping cart feature on our Web site to be easier to use so we can increase online sales by 25 percent.
- Our goal is to reduce human resource workload by 10 percent by offering self- service information on job benefits on the company intranet. Using the example of a training project, consider for a moment what such a project might involve. Are you supposed to write new training materials, hire staff to deliver classes, analyze the training’s effectiveness, update training materials as needed, and promote the training internally? In that case, the scope of your project involves managing the entire creation, delivery, and maintenance of a training program. Or is your goal to simply create the training materials? Or should your focus be limited to launching the new training, including promoting it to management and staff? These goals indicate very different projects, each with its own set of deliverables, tasks, resources, schedule, and costs. Writing a goal statement helps you focus on such a project from the outset.
Project scope When you understand your goal, you can begin to define the specific parameters of the project. This is often referred to as a project’s scope. It is necessary to know that a scope is not a goal. Take a look again at this goal statement from the previous section: The goal of the project is to upgrade the shopping cart feature Web site to be easier to use to increase online sales by 25 percent. A scope statement for this project might read: This project will involve all the steps to design and implement a new shopping cart feature (but does not include maintaining or refining it once launched). The cost of the project
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will not exceed $25,000 and implementation must be completed before October 1 to accommodate holiday sales traffic. The new shopping cart feature should help to increase sales by allowing customers more options to review their orders, give them more frequent opportunities to shop for more items after they have added a product to the cart, and allow them to save their cart contents and come back to complete the sale at a future date. The new feature must function on our existing Web technology infrastructure.
Writing a scope statement Scope statements define both what a project will involve and what it will not involve. In our example, the scope statement specifies that the maintenance of the shopping cart, once launched, will be handled by other project team. You typically get into specifics about the project budget, timeframe, and deliverables in a scope statement. You shouldn’t include every single detail, but you should have enough information that a project team can understand the most important parameters of the project. Together, a goal statement and a scope statement are two valuable tools for focusing yourself and your team and keeping you on track as you proceed. If you take the next logical step in pinning down your project at the outset, at this point you would create what’s called a project charter. This would include specifying a project name, getting authorization in writing to begin the project as of a certain date and to draw on a specified budget, creating a list of responsibilities, and having those with an interest in the project (called stakeholders) sign off giving you authority to run the project. You can use your goal and scope statements to help you obtain the various pieces of your project charter.
Breaking Your Project into Phases How does all this goal and scope analysis relate to Project? When you start a new project schedule, one of the first things you will do is to enter individual tasks. Knowing your goal and scope helps you to identify the steps you should be performing to accomplish them. Before you create your first task, you should probably begin to think beyond the scope of your project to more detailed project parameters. These parameters help you determine what tasks to include in your project. For example, you might consider:
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assessed and compared in order to select the best possible project. The financing schemes for the proposed alternatives must also be examined, and the project will be programmed with respect to the timing for its completion and for available cash flows. After the scope of the project is clearly defined, detailed engineering design will provide the blueprint for construction, and the definitive cost estimate will serve as the baseline for cost control. In the procurement and construction stage, the delivery of materials and the erection of the project on site must be carefully planned and controlled. After the construction is completed, there is usually a brief period of start-up of the constructed facility when it is first occupied. Finally, the management of the facility is turned over to the owner for full occupancy until the facility lives out its useful life and is designated for demolition or conversion.
Of course, the stages of development in Figure 1.2 may not be strictly sequential. Some of the stages require iteration, and others may be carried out in parallel or with overlapping time frames, depending on the nature, size and urgency of the project. Furthermore, an owner may have in-house capacities to handle the work in every stage of the entire process. By examining the project life cycle from an owner's perspective we can focus on the proper roles of various activities and participants in all stages regardless of the contractual arrangements for different types of work.
The project life cycle may be viewed as a process through which a project is implemented from beginning to end. This process is often very complex; however, it can be decomposed into several stages as indicated by the general outline in Figure 1.2. The solutions at various stages are then integrated to obtain the final outcome. Although each stage requires different expertise, it usually includes both technical and managerial activities in the knowledge domain of the specialist. The owner may choose to decompose the entire process into more or less stages based on the size and nature of the project. Very often, the owner retains direct control of work in the planning stages, but increasingly outside planners and financial experts are used as consultants because of the complexities of projects. Since operation and maintenance of a facility will go on long after the completion and acceptance of a project, it is usually treated as a separate
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problem except in the consideration of the life cycle cost of a facility. All stages from conceptual planning and feasibility studies to the acceptance of a facility for occupancy may be broadly lumped together and referred to as the Design/Construct process, while the procurement and construction alone are traditionally regarded as the province of the construction industry.
Figure 1.2: Project life cycle
There is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in construction management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should
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- Good communication between owner, designer, and construction manager is critical during this stage because selections during this design stage affect project appearance, construction and cost.
- This stage takes the project from 30% design to 60% design.
Contract documents:
- Final preparation of the documents necessary for the bid package such as the drawings, specifications, general conditions, and bill of quantities.
- All documents need to be closely reviewed by the construction manager and appropriate owner personnel to decrease conflicts, and changes.
- With the contract documents are almost complete; a detailed and complete cost estimate for the project can be done.
1.4.2 Procurement phase (Bidding and award phase)
- The project formally transits from design into construction.
- This stage begins with a public advertisement for all interested bidders or an invitation for specific bidders.
- In fast-track projects, this phase overlaps with the design phase.
- If the project is phased, each work package will be advertised and bid out individually.
- It is very important stage to select highly qualified contractors. It is not wise to select the under-bid contractors.
1.4.3 Construction phase
- The actual physical construction of the project stage.
- This stage takes the project from procurement through the final completion.
- It is the time where the bulk of the owner’s funds will be spent.
- It is the outcome of all previous stages (i.e., good preparation means smooth construction).
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- The consultant will be deployed for contract administration and construction supervision.
- Changes during construction may hinder the progress of the project.
1.4.4 Closeout phase
- Transition from design and construction to the actual use of the constructed facility.
- In this stage, the management team must provide documentation, shop drawings, as-built drawings, and operation manuals to the owner organization.
- The as-built drawings are the original contract drawings adjusted to reflect all the changes that occurred.
- Assessment of the project team’s performance is crucial in this stage for avoiding mistakes in the future.
- Actual activity costs and durations should be recorded and compared with that was planned. This updated costs and durations will serve as the basis for the estimating and scheduling of future projects.
Figure 1.3 shows the increasing cumulative cost as the projects progresses while the influence in the project cost and scope decreases.
1.5 Major Types of Construction Projects
In planning for various types of construction, the methods of procuring professional services, awarding construction contracts, and financing the constructed facility can be quite different. The broad spectrum of constructed facilities may be classified into four major categories, each with its own characteristics.
1.5.1 Residential Housing Construction
Residential housing construction includes houses and high-rise apartments. During the development and construction of such projects, the developers usually serve as surrogate owners and take charge, making necessary contractual agreements for design and